After narrowly missing promotion to the 1st division, Portsmouth made it back to the big league in the 1987/1988 season, breaking the transfer record again to bring in center forward Ian Baird from Leeds for £285,000, unfortunatly by the middle of this season Portsmouth was again in a dire financial state, this combined with some injuries to critical members of the squad. The most critical injury was to the legend himself Alan Knight who's injury in the tail end of the season weakened the side enough to send them straight back down at the end of the season.

The Gregory Years

In the summer of 1988, John Deacon sold the club to London based businessman Jim Gregory, Pompey then bought Warren Aspinall from Aston Villa for a club record £315,000. Manager Alan Ball was sacked in Jan 1989 to be replaced by John Gregory (no relation to Jim Gregory), the club transfer record again broken when John Beresford was bought in from Barnsley for £325,000. Things werent going well on the pitch when in Jan 1990 John Gregory was sacked being replaced by Frank Burrows. Frank Burrows however didnt last that long just under a year when in March 1991 he resigned with Tony Barton taking over as caretaker.

The appointment of Jim Smith in June 1991 along with a bunch of talented youngsters marked a turning point in Portsmouth's fortunes, with the team reaching the semi finals of the FA Cup at Highbury ending 0-0, then in extra time both teams scoring to leave it 1 - 1. The replay at Villa Park also ended 0 - 0, extra time was played still goalless, then the game went to dreaded penalities. Portsmouth ended up going out of the cup 3 - 1 after the shootout. Darren Anderton was sold for £1.7millon with Paul Walsh coming to Pompey as part of the deal. The 1992/1993 season was also one of disapointment, with Pompey missing out on promotion to the newly formed Premiership by 1 goal with West Ham having the better goal difference. Pompey broke their transfer record again in 1994 bring in Gerry Creaney from Celtic for £650,000. It was around this time that Jim Gregory called in the loans he had made the club over the past few seasons, so players were sold with little money for replacements, as a result of this the teams form decline, combined with the controversal sacking of Jim Smith in Jan 1995 relegation to Division 2 looks certain. New manager Terry Fenwick were pretty much doomed when at the end of the 1995/1996 season Pompey won away to Huddersfield Town and other results went our way.

In the summer of 1996 Terry Venables arrives at Pompey as a 'consultant', later taking over as chairman buying the club from Martin Gregory for 1 pound in 1997. The team enjoyed a run to the quarter-finals of the FA Cup in 1996/97, beating FA Premier League side Leeds United F.C. en route, but finished just short of the qualifying places for the play-offs for promotion to the Premier League. The 1997/98 season saw Venables lose his popularity with the club's supporters, as he signed several Australian players, most of whom failed to perform with much distinction, while his role as coach of the Australian national team meant he was frequently absent from Portsmouth; meanwhile, the team's results were poor. Two-thirds of the way through the season he and unpopular manager Fenwick left the club, Venables selling his shareholding back to Martin Gregory, son of former chairman Jim, while Alan Ball returned as manager. Relegation was again avoided on the last day of the season with a 3-1 away win at Bradford.

The 1998/1999 season was not a good one financially for Portsmouth the problems that the originally Gregory era plagued the second era with Martin Gregory resigning as chairman in December 1998